"We need every long-term rental we can get at the moment"
The $10,000 short-stay incentive scheme recently announced by the WA state government has the potential to offer some much-needed relief to the overheated rental market, according to the Real Estate Institute of Western Australia.
“The short-stay market is not the silver bullet for the rental issues we are facing,” said REIWA CEO Cath Hart (pictured above). According to research by the Real Estate Institute of Australia earlier this year, entire short-stay dwellings that may be suitable for long-term rentals only make up a small percentage of total dwellings and the ratio to private rental dwellings was generally low,” she said.
“In addition, not every owner is in a position to transfer their property and not every short-stay property is appropriate for the long-term rental market,” Hart said. “However, for some short-stay owners, this incentive may encourage them to make the switch. We need every long-term rental we can get at the moment, and if it does boost rental supply, even marginally, then that’s a positive.”
Rather than resorting to punitive measures like taxes, Hart commended the government for incentivizing property owners to return to the long-term rental market. She also applauded the government's various efforts to support the rental market, including the recently announced WA Rental Relief Scheme.
“There is no one solution to the situation we are facing, but every action taken helps,” Hart said.
To qualify for the incentive scheme, property owners must have offered their entire property for rent on short-stay booking platforms within the past six weeks and subsequently provide a minimum 12-month lease to new long-term tenants. The government will impose rent limits to ensure affordability and protect tenants. The payment will be divided into two parts: $4,000 upon approval of eligible applications and $6,000 after the long-term agreement reaches its 12-month mark.
Read next: WA to launch dedicated housing supply unit
Short-stay property owners can already express their interest online, and the formal application process is expected to commence by the end of 2023.
While acknowledging the scheme's limited timeframe, Hart said that it would provide assistance while other supply measures initiated by the government are being implemented.
“Supply is the greatest issue facing the property market at the moment, but it takes time to get houses out of the ground,” she said. “The government recognises supply is the issue and are implementing a range of initiatives, such as planning reforms and financial assistance with infrastructure, to help build more dwellings quickly. The incentive scheme is another circuit breaker that will provide some assistance while other supply measures come into effect.”
Hart also expressed REIWA's support for the registration scheme, which aims to provide an overview of the entire short-stay market and ensure consistent management of the short-term rental accommodation sector throughout WA.
Have something to say about this story? Let us know in the comments below.
